Ahead Of The Fed
The markets have absorbed U.S. Retail Sales, earnings releases, Asian and European bullish equity runs, and oil and gold prices that have set new yearly highs. Ahead lies the FOMC rate meeting minutes that will be revealed at 14:00 EDT on Wednesday. The major pairs may consolidate overnight moves ahead of the FOMC release, as once again we see a shift in trading activity.
During the last three months the U.S. session has dominated price movement, yet over the last few weeks the session has not generated too much price action. We are seeing 30 minute bursts of movement that break near-term ranges, and then watch heavy consolidation of the breaks. The regional open and close of Asian, European, and U.S. commercial markets is when the momentum hits at the moment.
The markets are at the beginning of the 3rd quarter earnings season, and as such are at a time where volatility and reversals can come out of nowhere on the strength of hits, or misses as the case may be, on expected earnings numbers. Traders have seen already the impact on intra-day set-ups that are reversed or turbo-charged as the earnings reports hit. Long stocks on positive earnings have been equating to short-dollar plays.
JPMorgan reported $0.82 EPS, better than expected, and enough to spike the S&P higher. However, it has not been enough to hold the dollar lower, and the Chicago futures market just came alive and sent the major currencies off to test overnight support areas.
Positive earnings reports have allowed equities to hold higher. The real test will be when a major player misses their mark. The S&P and Usd are conversley correlated right now.
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com
TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.
The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.
|
